Luno integrates SegWit to reduce fees
What is SegWit?
SegWit, short for Segregated Witness, is an
improvement to the way Bitcoin transactions
are sent. With SegWit, certain information is
restructured in Bitcoin transactions, rendering
them effectively smaller, which means more
transactions can now fit into a block. This, in
turn, should help make Bitcoin transactions
faster and cheaper than what they currently
are.
Note that SegWit is not the same as the
proposed (and suspended) SegWit2X fork.
For a more technical description, see this.
What’s in it for me?
Cheaper and faster Bitcoin transactions!
We already implemented SegWit on Bitcoin
send transactions in December 2017. This has
significantly decreased the Bitcoin network
fees that you pay when you send Bitcoin. By
implementing SegWit internally, Luno has
managed to reduce the send fees paid by
customers by over 25% already. As customers
start switching over to new SegWit addresses,
this will translate into a further reduction in
sending fees in the coming weeks and
months.
Note that Bitcoin network fees fluctuate,
based on blockchain congestion, so comparing
fees over different time periods isn’t always
straightforward.
Until recently, you could only receive Bitcoin
with Luno in a non-SegWit Bitcoin wallet
address (known as a legacy wallet address).
From today, you can also receive Bitcoin in
your new SegWit Bitcoin wallet address on
Luno. Note that the receive fee, explained
here, will remain in place and that you can
also send Bitcoin instantly and free of charge
to anyone, by using their email address or
mobile number.
What do I need to do?
To add a SegWit wallet address:
- Navigate to your Luno account (mobile app
or web) - Select Wallets from the menu
- Select your BTC wallet
- Select Receive Bitcoin
- Select Add address and follow the
instructions
Now, when you want to receive Bitcoin, you
should use your SegWit Bitcoin receive
address. Legacy Bitcoin addresses start with a
1, whereas SegWit Bitcoin addresses start
with a 3. Bitcoin sent to your old, legacy
Bitcoin address will still work.
Note: You can send Bitcoin from a legacy
wallet to a SegWit wallet (and vice versa) — it
is still done on the same Bitcoin blockchain.
It’s just if you’re sending to and from a
SegWit-compatible wallet, you may enjoy a
reduction in fees.
In closing
We’d like to thank you for your patience. We
planned on launching SegWit much earlier, but
with the price, interest, transactions and new
customer registrations reaching incredible
peaks over the past two months, we had to
apply all our resources to ensure site
reliability and faster response times.
We’re on a journey to upgrade the world to a
better financial system and this is one more
milestone on the way there. We’d like to thank
you for choosing us as your guide to this new
frontier and we’re committed to bringing you
more improvements and updates as we travel
there together.